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Recovery in the U.S. and Mexico: A View From the Bottom

It is a sad truth that the structure of the Mexican economy in the early twenty-first century requires that poor citizens who seek work north of the border do so in sectors of the U.S. economy that provide sub-minimum wages, horrendous working conditions and unscrupulous employer practices.

In many ways an economic recovery in Mexico will depend on the recovery and growth of the low-wage labor market in the United States, a market that, in turn, depends increasingly on the labor of undocumented Mexican migrants. It is a sad truth that the structure of the Mexican economy in the early twenty-first century requires that poor citizens who seek work north of the border do so in sectors of the U.S. economy that provide sub-minimum wages, horrendous working conditions and unscrupulous employer practices.

Credit: Victor Blue for The New York Times

There are just under 12 million Mexican immigrants living in the United States, about half of them undocumented; a significant percentage have found employment in those low-wage jobs that provide just enough income to survive and to remit a percentage of their earnings to their extended families in Mexico.

The U.S. Labor Department estimates that over half the U.S. jobs created in the gradual recovery from the meltdown of 2008-2009 are occupied by Hispanics, with about 20% occupied by workers of Mexican origin. These jobs are principally at the bottom of the economic ladder. Against long odds, the low-wage job market in the United States, exploitative as it may be, provides a measure of hope—at times, a last hope—for many impoverished families in Mexico. It also provides an important support, through economic remittances, to the macroeconomic health of Mexico’s national economy.

After oil, and barely ahead of tourism, remittances, the money sent home by Mexicans working abroad, mostly in the United States, are the country’s second largest legal source of hard currency. This past January, the Bank of Mexico reports, Mexicans living in the United States sent just over five million separate transfers worth about $300 each to extended family members in Mexico. In the year that ran from February 2011 through January 2012, the bank estimates the value of remittances to have been $22.8 billion dollars, a gain of 6.9% in dollar terms over the previous February-January period.

And last week, the Bank announced that January’s remittances had increased by 7.2% over the previous January to just over $1.5 billion dollars. Taking the devaluation of the peso into account, the increase actually came to about 14% in real pesos. Among other things, the expansion of opportunities in the less-than-minimum-wage U.S. labor market spurred the increase in remittances.

Increasingly, low wage jobs are to be found in the U.S. service sector, which, despite (or perhaps because of) the Great Recession, continues to expand. Ongoing labor organizing drives among low-income workers in the U.S. warehouse and car wash industries—a significant percentage of whom are Mexican immigrants—allow us a glimpse of the nature of these jobs.

A group called Fair Warning, which investigates and reports on safety, health, and corporate conduct, reported last week on a class action suit being brought against three large firms in the warehouse industry in southern California. The suit charges three large companies with fraudulent pay practices. (Southern California is the largest of the warehouse distribution hubs, followed by the Chicago area and central New Jersey. The companies in all three hubs service huge retailers—Walmart, for example—and depend on vulnerable immigrant labor.)

The largest of the three companies is called Inland Empire, in the words of Fair Warning, “An economic juggernaut in the arid flatlands east of Los Angeles that employs about 100,000 people, the Inland Empire warehouses are a staging point for Apple computers, Gerber baby clothes, Polo apparel and other brand-name imports. They handle goods from Asia that come through the ports of Los Angeles and Long Beach, to be distributed around the U.S…. According to court documents and interviews with workers: Crew leaders … were under orders at some warehouses to force workers to sign blank time sheets, a tactic that made it easier to cheat employees out of their rightful pay. Workers often were paid only for the time they spent loading and unloading trucks—not for the time they put in sweeping warehouses, labeling and restacking boxes or waiting to find out if they would be assigned work. High heat in the warehouses and constant pressure for speed created safety problems…. Many workers, classified as temporaries despite years of service, said they were threatened with being blackballed and never being hired again if they raised questions about their pay or took part in protest or unionizing efforts…. The big retailers are separated from the workers, and shielded from legal exposure, by layers of intermediary companies.”

The Service Employees International Union (SEIU), backed by the Change to Win labor federation, has launchedan organizing drive called Warehouse Workers United at Inland Empire, thus far with little success. The culture of fear, need, and vulnerability among immigrant workers—especially undocumented workers—has raised the stakes of the struggle and made organizing more difficult.

Meanwhile, this week in New York, a coalition of community and labor organizations plans to launch a citywide campaign to organize workers in the (much smaller and much more informal) carwash industry. The unions, principally the Retail, Wholesale and Department Store Union, hope to unionize carwash workers in the city’s five boroughs. The community organizations include Make the Road by Walking and New York Communities for Change, two groups with a long history of advocacy for New York’s poor.

The same combination of fear, need, and vulnerability that exists among the warehouse workers can be found among the car washers, with an additional difficulty. Instead of a handful of large companies with whom to negotiate, the car wash industry exists in hundreds of small companies, each of which will require its own unionizing drive.

The New York Times reported on Monday: “The organizing coalition, called Wash New York, interviewed 89 carwash workers at dozens of carwashes around New York City and found that about two-thirds of them said at times they made less than the state-mandated minimum wage of $7.25 per hour.

The typical schedule was at least a 60-hour workweek, but a majority received no overtime pay above 40 hours, as required by law. Those who received overtime pay often made less than the mandated rate of time-and-a-half, the coalition said. Rest and lunch breaks were fleeting and unpaid, many said.

Not a single worker in the survey reported receiving paid sick days, and only one said he had been offered a health care plan, the organizers said.

Most of the workers said they were not given proper protective equipment and training to handle the caustic cleaning products used at carwashes. Some workers described using chemicals that burned holes in their clothing, the organizers said.”

These are just a few of the jobs behind the logic of remittances, a key portion of Mexico’s road to macroeconomic stability and development. Of course, no one is forced to take these jobs. They are simply key parts of the survival strategy of many Mexican families.

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